POStPlan by the numbers


May 12, 2012

The Postal Service's POStPlan initiative announced on May 9, 2012, would reduce hours at 13,000 post offices from eight hours a day to six, four, and in some cases, two.  Here's how the list provided by the Postal Service breaks down.   (An overview of the plan is here.) 

The plan would reduce the total number of operating hours per day at these 13,000 offices from about 100,000 hours to 57,000 — a reduction of 43,000 hours or 43%.  Over the course of a year, hours of operation would be reduced by over 11 million hours (43,000 x 260 weekdays — the plan doesn't deal with Saturdays).

The country has 32,000 post offices.  Figuring they operate eight hours a day (not all do), five days a week, the total operating hours for the USPS retail network comes to about 66 million hours.  POStPlan would thus reduce that by 11 million hours, or 16%.  

The Postal Service brings in about $12 billion at retail windows (most of its $65 billion in revenue enters the system at processing plants and bulk mail entry units).  The post offices on the POStPlan list bring in a smaller portion of that $12 billion than their numbers might suggest (they're on the list because they're low revenue), but if the 16% decrease in total network operating hours translated into just a 2% decrease in revenues, the Postal Service would lose $240 million.  

Just to look at it a slightly different way:  Say the 13,000 post offices on the POStPlan list bring in $800 million in revenues (a rought estimate based on various sources), and let's say that when they're closed almost half the day, 25% of that revenue goes elsewhere.  That would come to $200 million in lost revenue.

In other words, figured either way, the revenue losses could be significant, and they could wipe out a large part of the estimated cost savings of $500 million. 

Much of that $500 million in savings would come from the huge reduction in operating hours.  However, the larger portion of the savings derives from replacing postmasters with part-time workers earning about $12 an hour.  If every post office on the POStPlan list were open eight hours a day (1450 of them currently operate at reduced hours) and staffed by $12/hr employees, the plan would still save, at least on paper, $300 million, not including lost revenue.  In other words, the plan is not so much about adjusting hours of operation to each post office's revenues as it is about replacing good, middle-class jobs with low-paid, part-time jobs.  And that's largely what the attack on the Postal Service is all about.

When the Postal Service provides a detailed analysis of its cost savings estimates as part of the Request for an Advisory Opinion to the PRC later this month,  the numbers are sure to be challenged.  Is the Postal Service  including an estimate for lost revenue?  What about labor costs for work postmasters can do during an eight-hour day, but won't be possible for a part-time worker to do when the office is open only a few hours?  How much will it cost to train and supervise 13,000 new part-time workers, and then train their replacements, since turnover is likely to be high?  Does the $500 million savings estimate include the additional costs of rural delivery, since many communities where the post office is open part of the day will also need extended carrier routes?

Looking at the plan state by state, we find that for the average state, 37% of the post offices will experience reduced hours.  Each state has, on average, about 620 post offices, with 255 of them on the POStPlan list.  The following table shows how that breaks down, state by state.  

The table indicates how many post offices appear on the POStPlan list, an estimate of how many post offices, including stations and branches, are in each state, and the percentage of post offices that would be impacted.  (The numbers for the "State Total" come from a list of all post offices, provided by the USPS to the PRC, which you can download here.)

STATE
ON
LIST
STATE
TOTAL
PER
CENT
 
STATE
ON LIST
STATE TOTAL
PER CENT
AK
128
163
79%
 
MT
186
337
55%
AL
254
558
46%
 
NC
234
835
28%
AR
391
548
71%
 
ND
225
322
70%
AZ
50
328
15%
 
NE
317
477
66%
CA
265
1393
19%
 
NH
59
239
25%
CO
185
431
43%
 
NJ
69
643
11%
CT
60
278
22%
 
NM
153
322
48%
DC
0
38
0%
 
NV
37
121
31%
DE
11
59
19%
 
NY
632
1742
36%
FL
108
708
15%
 
OH
451
1145
39%
GA
258
646
40%
 
OK
328
617
53%
HI
12
86
14%
 
OR
129
421
31%
IA
572
898
64%
 
PA
826
1841
45%
ID
106
236
45%
 
PR
3
123
2%
IL
679
1250
54%
 
RI
13
80
16%
IN
385
765
50%
 
SC
143
410
35%
KS
362
610
59%
 
SD
222
289
77%
KY
421
775
54%
 
TN
241
563
43%
LA
204
513
40%
 
TX
616
1656
37%
MA
58
570
10%
 
UT
71
226
31%
MD
138
451
31%
 
VA
364
903
40%
ME
244
453
54%
 
VT
145
277
52%
MI
355
877
40%
 
WA
166
533
31%
MN
407
769
53%
 
WI
385
697
55%
MO
540
961
56%
 
WV
478
755
63%
MS
216
412
52%
 
WY
80
166
48%

As the table shows, generally speaking, the most densely populated states — like New Jersey, Rhode Island, Massachusetts, and Connecticut — have fewer post offices on the list (on a percentage basis), while the rural states have a higher-than-average number on the list.  The states with the highest percentage of offices on the list are North and South Dakota, West Virginia, Nebraska, Arkansas and Kansas. (You can download a sortable list here.)

Perhaps the elected officials from the states most affected will have a special message for the Postmaster General.  It's certain that their constituents will.

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